Along with tea, a dry wit and a world renowned reserve the British music scene has become the backbone of this country.
Acts such as Adele, Elbow and Arctic Monkeys have enjoyed immense success across the world and have managed to give the British economy a bit of a jolt on the way too. Adele’s second album 21, which owed much of its success to her jaw-dropping performance of ‘Someone Like You’ at the 2011 Brit Awards, has been certified platinum nine times after spending 16 weeks at number one.
This record made Adele £6m, putting her in joint 9th place with Duffy and Lily Allen on the list of richest British musicians under 30. Many British artists are enjoying the same career success as Adele and the latest figures from the British Phonographic Industry (BPI) shows that British artists make up 12% of global sales of recorded music. In America, one of the biggest music markets in the world, British artists account for one in 10 albums sold.
Many artists are frustrated by the scheme’s poor performance and are questioning whether the government truly has faith in the British music industry
It can’t be denied that there is money in the music industry but most acts find it hard to acquire a loan to get started as most banks view creative ventures as a risky business deal. This is where the £2bn government-backed scheme enterprise finance guarantee (EFG) steps in.
The scheme, which was set up to help small and medium business (SMEs) get loans, was broadened in March 2009 to include “music composers and own-account artists”, those not signed to a record label, but the latest reports show that only two music sector loans have been approved in over two years.
Launched in January 2009 EFG aims to support business with an annual turnover of up to £25m seeking loans between £1,000 and £1m. The government guarantees on 75% of EFG loans to encourage banks to lend to more stereotypically risky creative ventures.
Many artists are frustrated by the scheme’s poor performance and are questioning whether the government truly has faith in the British music industry.
Brian Message, co-manager of Radiohead and Kate Nash, is one of only two people who managed to receive funding under EFG. He applied for £200,000 to finance the Rifles’ third album and tour but was rejected.
He spent two and a half years trying to convince a bank to lend the band the money and in the end received £45,000 from RBS, less than a quarter of the amount he originally asked for. Message told The Guardian that if the bank had loaned him the cash when he first enquired the extraordinary success of the band would have "resulted in a successful repayment plan where everyone was a winner".
Since the music industry can be turned into a viable business model it seems there has been a catastrophic lack of communication between the government and the banks. To avoid EFG becoming a failing scheme the government needs to devise a plan to focus on access to finance and supporting creative SMEs.
Industry insiders are looking to the Creative Industries Council (CIC), launched in March 2011, which was set up to provide a “voice for the sector with the financial community and coordinate action on barriers to growth”. The CIC will be meeting this week so we can only hope that they break down a majority of the red tape creative SMEs face when applying for funding.
One thing we can be certain of is that if we want to secure the future of the British music industry we need to make sure it is well funded.
